Nearly 69 million shares — more than 8 times the average volume in the past five trading days – exchanged hands during the session, when about $6.9 billion of Softbank’s market capitalization was erased.

The decline is the stock’s worst on record, according to FactSet data.

The severe reaction, in at least some measure, could be because of the surprise the news sprang on investors.

Goldman Sachs analysts note that over the past 4 to 5 years, Softbank’s entry into new fields had centered on internet-related companies with little invested capital. “[Softbank] stated in the past that it is not very interested in acquiring overseas telecom carriers,” they added.

Macquarie analysts Nathan Ramler and Takako Takahashi wrote in a report the talks to buy Sprint mark “a radical departure” for Softbank from its internet-based strategy. “The ongoing consolidation in the U.S. mobile market may have been a catalyst for SoftBank to consider using its strong yen-based cash flows and inexpensive borrowing costs to get involved.”

The analysts however said they don’t see any “meaningful synergies” in a full-scale takeover, and that they would prefer to see Softbank take a minority interest.

They said Sprint was likely to report negative earnings-per-share (losses) until the second-quarter of 2015 and negative free cash flows till the first half of 2014. If Softbank did an all-debt deal to buy Sprint, the Japanese company could very well dilute its own earnings and free cash flows. Such a deal could also pressure its credit ratings.

Moreover, the premium that Softbank may have to pay for Sprint could be so much higher than the U.S. firm’s net assets that the resulting goodwill accounting could weigh heavily on its reported profits for several years.

A deal with Sprint “could potentially be the first step towards other related transactions, such as buying the rest of Clearwire
/quotes/zigman/112837/quotes/nls/clwrCLWR that Sprint has not had the financial wherewithal to purchase, or other U.S. mobile carriers,” Macquarie said. They added that frequency spectrum, or the airwaves used to transmit voice and data, might also be “at play.”

But even if the two companies reach an understanding, and their shareholders approve it, the deal may still face difficulties in getting all the required clearances to be consummated.

The reason: possible national security concerns.

“We understand that the U.S. military uses Sprint’s backbone network for part of its communications. As such, we believe there could be resistance against a foreign company taking control of the asset,” the Macquarie analysts said.

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